Saskatoon's water still the cheapest on the Prairies, report says

Saskatoon’s water remains the cheapest among the five largest Prairie cities for residents, despite three straight years of rate increases, a city report says.

The report is on the agenda for consideration during city council’s budget deliberations, which start Monday. It says Saskatoon’s residential water rates are lower than the rates charged in Calgary, Edmonton, Regina and Winnipeg.

On the commercial side, Calgary’s rates are the lowest, but Saskatoon’s are second lowest.

“Saskatoon has the lowest bill for a typical residential customer among comparable Prairie cities,” the report says. “Saskatoon’s rates are also competitive for commercial rates.”

Cities structure their water rates differently. The Saskatoon numbers in the report include water and wastewater infrastructure charges, but do not include the city’s storm water utility and flood protection levy.

In 2017, Saskatoon residents paid $95.97 for consuming 25,500 litres of water in a month. That same amount of consumption would have cost $125.07 in Regina, $125.12 in Winnipeg, $120.46 in Calgary and $119.03 in Edmonton, according to the report.

City council approved four straight years of water rate hikes of more than nine per cent, starting in 2016. Proposed hikes of 9.25 per cent for 2018 and 2019 still need to be approved officially during budget talks. Water rates jumped 9.5 per cent in 2016 and 2017.

With the proposed residential rate increase, 25,500 litres of water in a month is expected to cost $105.31 in 2018. That would keep Saskatoon cheaper than the other large Prairie cities, despite a small increase in Calgary that would boost its rate to $121.36. Winnipeg’s rate is expected to jump to $134.31.

Edmonton’s proposed 2018 rate is not included in the report, which says Regina’s water rates are expected to rise two per cent.

On the commercial side, only Calgary charges less for 85,000 litres of water in a month — $296.47 in 2017. This compares to $309.75 in Saskatoon, $313.76 in Edmonton, $337.46 in Regina and $383.35 in Winnipeg. The same monthly volume is expected to cost $342.54 in Saskatoon next year.

The city also transfers money called a ‘return on investment’ from its water utility to help cover the operating budget, the report says. This amount was $6.35 million in 2017 and is expected to rise to $7.85 million in 2018.

The city is increasing the amount transferred to operations each year until it reaches 10 per cent of water utility revenues or $13.68 million in 2021.

The city decided transferring money back to the operating budget was preferred over lower water rates so residents would benefit from the sale of water to nearby communities like Martensville and Warman, the report says.

It also purports to compare Saskatoon’s return on investment from its water utility with other cities.

Saskatoon’s defined amount for 2017 of $6.35 million compares to $42.5 million in Calgary (a capped amount) and $35.6 million in Winnipeg (12 per cent of budgeted revenues). The report does not explain the absence of Regina and Edmonton from this comparison.

Saskatoon Water also transfers grants in lieu of property taxes to the city’s operating budget. In 2018, it’s expected to transfer $10.7 million in grants-in-lieu and another $2.3 million in general administration charges to the city’s general revenues fund.

Saskatoon Water paid $9.49 million in grants-in-lieu to the city in 2017. That compares to $9.68 million in similar transfers from the water utility in Regina in 2017. Regina has about 47,900 fewer residents than Saskatoon.

Coun. Randy Donauer asked for the report on water rates and the return on investment from the water utility.

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